17 March 2016

The Scottish moral superiority complex about to be tested with higher taxes


One of the most amusing aspects of the aftermath of George Osborne’s latest Budget has been listening to the SNP’s deputy leader Stewart Hosie offer a punchy account of how the Chancellor got his forecasts all wrong. From the party that would have landed Scotland with a £15bn black hole and the worst deficit in the EU thanks to its kamikaze plans for independence this is irony indeed.

There is a serious point though. Osborne has just presented the SNP and the Scottish electorate with a fascinating choice. The threshold at which the 40p tax rate is paid is to rise above inflation (although it should never have got so low in the first place). But thanks to the powers the Scottish parliament now has over taxation, the government north of the border can if it decides stick with the old threshold, and deliver what amounts to a tax rise.

It is obvious that most Scots – who don’t pay tax at that rate – will shrug their shoulders and say fine. Someone else can pay. Someone else can always pay.

But what is about to be tested is the Scottish middle class claim that it loves higher taxes as a sign of virtue. For three decades or more (perhaps even for three centuries) Scottish politics ‎has operated with a moral superiority complex at its heart. Scots care more, apparently. They are less well-disposed to the notion of profit. They are communitarian. The repetitive promotion of this line by politicians and large parts of the Scottish media has created an endless feedback loop of cant. Even the voters seem to have come to believe it.

Now, after years of this self-indulgent claptrap, they have the power to jack up taxes on aspirational voters.‎ This is awkward for the SNP ahead of May’s election, because it has very cleverly built a broad electoral coalition by avoiding such choices and keeping it general, warm and fuzzy, when they are not blaming Westminster, so that the far left and “tartan Tories” can vote SNP. ‎For the Scottish Tories this Scottish tax rise is an obvious opportunity to say – as the top-selling Scottish Daily Mail put it today – that Osborne’s tax cuts are being “cancelled” by the SNP.

It remains possible, I put it no more strongly, ‎that this will test the patience of a small (but not that small) and important group of voters, namely those who do not yet earn enough to pay the 40p tax rate but who aspire to earn those levels and might not like being punished for it. That was the point missed by Labour’s John Smith (great man, but wrong on taxation) when he wanted to hit just these kind of earners. It has long been said Scottish voters have no such concerns. That notion is about to be tested.

Iain Martin is Editor of CapX